This blog posts answers to questions given to us by ministers and others serving in Christian ministries advancing the gospel of Jesus Christ. It also discusses other financial topics that those in gospel ministries face. We trust the information provided can be helpful to you.

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Answer:
The expenditure for batteries, if meeting the following general guidelines for use in connection with the pastor's personal residence, may meet the requirements. Although there are not likely court cases or Revenue Rulings citing the exact examples offered here.

"A minister’s housing allowance benefit is non-taxable income to the extent that the allowance is used for housing expenses. The three-part test includes consideration of the fair rental value of the home, plus actual costs of utilities (see this blog post regarding the three-part test). In addition, the expenses must be incurredrelative to the minister’s principal residence. According to Federal Tax Regulations, Regulation, §1.107-1, Internal Revenue Service, Rental Value of Parsonages, only food and servants are specifically excluded."

Question:A church would like to "gift" 10% of the sale price of the parsonage to a pastor towards his retirement. Is the pastor going to be subject to income tax on that gift? Is it taxable if put into an IRA on his behalf?

Answer:Whether the gift is paid is paid to him directly or through contributions to his Traditional IRA, the “gift” will be taxable and reportable on Form W-2, Box 1. Internal Revenue Code section 102(c) clearly states that gifts given to employees by their employers are taxable compensation. The IRS has consistently applied this provision to self-employed (non-employee) individuals who provide services for an organization as well. Only the facts and circumstances surrounding a gift can determine whether IRC section 102(c) does or does not apply; a letter stating that a payment is a gift will not override the substance of a transaction (2008 Blog).

Having said this, the church may wish to consider other alternative means. For example, cooperation with the p…

S. Pearce Carey, William Carey’s great grandson, offers a family perspective on the brilliant mind and consecrated life of one who first left England to reach to the regions beyond with the Gospel of Jesus Christ. From the historical setting of his birth on August 17, 1761, to the legacy he left in the land of India and upon the world following his death on June 9, 1834, Carey’s life story leaves its reader with a sense of enablement to attempt great things for God. For William Carey once said,

Expect great things from God. Attempt great things for God. It was 32 years before Carey left England never to return. He was motivated by the lives and stories of such men as Captain John Cook, explorer of the islands of the South Pacific and mapper of New Zealand and present day Australia; slave trader turned abol…

Corey Pfaffe

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This information is provided as a service of MinistryCPA.org to ministers and Christian ministries. Please contact me or your personal professional advisor to determine how this information may apply to your own situation.